I saw Brandon and Joshua's call for success stories and thought I would share this one:
Last year I sold an investment property in San Diego County and was looking for a place to put some funds. I had been dabbling in bank owned residential building lots for a bout a year in the Salt Lake City, UT area.
While looking at some MLS-listed lots in a very upscale neighborhood in Park City, UT I identified some lots on-line that fit my "good value" criteria. One lot, priced at $95k had open space at the rear and million-dollar-plus homes on either side. While those attributes were compelling, I really didn't want to tie up that much cash for who knew how long. I decided to visit the neighborhood and of course used Google Maps on my iPhone to keep me from getting lost. As I pulled up the satellite view of my favorite lot I was confused. The satellite image showed the little red pin stuck in what looked like a huge, excavated hole in the ground. If this was correct, my favorite lot had been prepped for construction.
I navigated to the lot but there was no sign of any excavation or construction. The bank's sales agent also knew nothing about it - very common for REO agents. After a bit of research at the county planning office, I found a full set of approved architectural plans, (worth at least $25,000) and receipts for over $20,000 in paid impact fees! I made an offer that day and purchased the property for $86k. I had the plans bid out for construction but just simply didn't have the resources to build that kind of luxury home on speculation. I engaged a local realtor who marketed the lot with emphasis on the time and money-savings of approved plans and paid fees. The lot sold for $146,000 in January of this year and I made a little over $46,000 after all fees and commissions. Thank you Google Maps and iphone!
That's creative real estate at its finest! Awesome story, @Douglas Larson . Thanks for sharing it.
Love it. Provided my appraisal comes in next week, my iPhone did the same for me.
I was in the car wash on a saturday morning drinking my coffee. I figured, hey its been almost a week since i looked at the MLS kickouts in my email from my agent. Pulled it up on my phone and found the house I currently live in. It was directly behind my house, I never even knew it was for sale. Long story short I bought it for 82k, and 1 year later my appraisal should come in between 135-140k. :) Sometimes, technology is a huge blessing. :)
Wow, great job @Douglas Larson ! Talk about how we can take advantage of new technology. But more than anything else, you really thought smartly.
Nice @Douglas Larson ! Great story! And hey - I just sent you an email (is it still the one on your profile?)
Google Earth is an incredible resource. I can't believe it's free. I use it pretty often to build plats for oil & gas companies. I have a mentor, of sorts, that is a long time commercial developer in south Texas. He preaches to me every time we talk about using Google Earth to build a map of an area of interest with all the detail you can find on it. He says he has located many of his development opportunities by building maps like that.
Very well done :)
Great story, @Douglas Larson . Thank you for sharing. Shows how going the extra mile to do some further digging can be well worth the time and effort.
Douglas - Awesome work!
Don't sell yourself short, you are the one that put the pieces together.
Now to ask a potentially silly question: I'm not familiar with the planning office records procedures, but is there a way to take their records and cross reference them to the local market? In this manner, one could potentially look to siphon out similar potential deals. You'd still need to analyze them further of course, but your first payday was substantial and could be well worth emulating.
You bring up a great question Anthony! You've got me wheels turning now. Once impact fees have been paid and permits have been pulled, there is a 1-2 year window (depending on the county) in which the builder has to start construction. There must be a way to search for expired permits where fees were paid. I will absolutely look into it.
Very clever of you Doug!
I love this site, you can learn so much in so little time.
Make sure to keep us up to date on your progress. I'd love to find out how that works out for you.
I've been so busy chasing and making other deals over the past 18 months I never gave much thought to simply sticking with this as a predictable strategy. In my area the inventory of low-hanging fruit has really dropped over the last year so I need to do a little more digging and negotiating to make each deal happen. I will pursue these specific kinds of land deals actively now instead of relying on the wind to blow something my way.
Below is the google maps screenshot that sealed this deal for me.
Great story, nice work. I see only one problem with it, you didn't call me first!
@Will Barnard aka "BiggestPockets"
Yeah, if I had only known you then . . .
It would have been great to spec a luxury home on this lot. The builder that bought it from me projected a 250K+ net gain. I hate to leave that much money on the table but there is also the opportunity cost. I was able to put that cash immediately into another property. I will think of you the next time I find a sweet deal that needs a fat wallet!
Now you're talking Douglas!
What a great story. Motivational.
Thanks for sharing
You know what came to mind reading this article? Many preach finding motivated sellers(marketing) to find great deals.
There also seems to be some value in "information" deal hunting via researching permits, code violations, county/tax records and so forth to find gold, almost creating your own deal through red flags...
You've got it! Most great deals have to be "created" but sometimes there are awesome investments just waiting to be discovered like hidden treasure.
You asked me to keep you posted on my search for similar deals...
Dealing with my county office (Zoning/Planning division) has been difficult. I have visited twice and spoken to several people. They say they have no way to search the database for the criteria I'm looking for - specifically for expired SFR permits that are over 1 year old. They were reluctant to say they have no way of tracking expired permits and only find them when a builder or owner places a request for an inspection during the permit process and finds that a permit is expired. They do not "purge" their permit files on any timetable.
To find these needle in the haystack deals in my county I will have to search through thousands of 2 to 5-year-old records and cross reference them with a visual confirmation of completion....as in, drive to every address. Forget that!
I am hoping that the record-keepers in some of the smaller towns with have better checks and balances to help me weed through the data. I will post again.
@Douglas Larson Thanks for the update! I can't say I'm surprised that dealing with your county office was a drag lol. I mean when I really think about it, it's not surprising that this process would have barriers. If it didn't, someone would likely be capitalizing on it and perhaps your 46k deal wouldn't have been there for you to find.
Perhaps there is an easier way to cross reference data, but for now I'm unsure. I'll talk with some people in my local market and I'll be sure to let you know if we come up with anything.
Thanks again for the update!
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